Question

Mr. Talha wants to make an investment of Rs:50,000 in one of the two
banks that fetches him the maximum return after 6 years. One bank offers
8% interest compounded annually and the other offers 7.5% interest
compounded semi-annually. Which bank should be chosen, so that he gets
the maximum return?

A.Option 2
B.Both A and B
C.Option 1
D.None of these

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Answer 1

Answer:

B is the correct information gshdhdbdnjdd

Answer 2

Answer:

The answer is (c) Option 1

Step-by-step explanation:

The principle amount is P = 50,000

The rate of interest in the first bank is r = $\frac{8}{100}$ = 0.08

It is given that the amount is compounded Annually in the first bank, therefore n=1

Time t in years = 6

Let A be the total amount after six years

using the formula,

$A = P(1+\frac{r}{n} )^{nt}$

$A = 50000(1+\frac{0.08}{1} )^{6}$

A = 79,343.716

The rate of interest in the second bank is r = $\frac{7.5}{100}$ = 0.075

It is given that the amount is compounded semi-Annually in the first bank, therefore n=2

Let A be the total amount after six years

$A = P(1+\frac{r}{n} )^{nt}$

$A = 50000(1+\frac{0.075}{2} )^{2(6)}$

A = 77,772.71657

Since the total amount in the first bank is greater than the second bank

Mr. Talha should choose the first bank